AI Data Insight
According to the latest data, the year-over-year growth rate of Japan's real average household spending on goods and services plummeted to -3.1% in May 2026, marking a sharp reversal from 0.2% in April. Although some external market data suggest the overall consumption decline has some underlying support, the weakness in goods and services components highlights that high prices continue to erode consumer confidence. Whether domestic demand rebounds in the coming months will be a key variable for the Bank of Japan's policy direction.